Additional Coverage:
- The battle brewing at Starbucks just spilled over into its biggest sales event of the year (businessinsider.com)
Starbucks Baristas Brew Up “Red Cup Rebellion” on Major Sales Day
Nationwide Strike Disrupts Red Cup Day, Pushing for Contract Negotiations
Over a thousand Starbucks baristas are taking a stand, launching an open-ended strike that aims to shake up one of the coffee giant’s biggest sales days: Red Cup Day. This annual event, where customers receive a free reusable cup with a purchase, typically brings in record-breaking sales for Starbucks. However, today, unionized workers at more than 65 stores across 40 U.S. cities are walking off the job, demanding that Starbucks return to the bargaining table to finalize their first contract.
This marks the fourth organized strike by the Starbucks Workers Union since 2023, and the third since CEO Brian Niccol took the helm in September 2024. The union has stated that workers at over 550 unionized stores are prepared to join the action if contract negotiations don’t resume.
According to foot traffic data from Placer.ai, Red Cup Day in 2024 saw a significant 42.4% increase in daily visits compared to an average Thursday. The union hopes this disruption will pressure Starbucks to address their demands.
A Starbucks spokesperson acknowledged the strike, stating that 99.9% of their stores remain open and that nearby locations can serve customers if temporary closures occur. The company is confident they will still exceed sales expectations for the day across their North American coffeehouses.
“We’re disappointed that Workers United, [which] represents less than 4% of our partners, has called for a strike instead of returning to the bargaining table,” the spokesperson said. Starbucks currently operates 16,864 stores across the U.S.
The core of the dispute revolves around the ratification of a collective bargaining agreement, with workers striving for a contract since the first store unionized in December 2021. Despite some initial progress and a company commitment to reach an agreement by the end of 2024, talks broke down last December, with both Starbucks corporate and the unionized workers blaming each other for the impasse.
“We’ve been very clear – when the union is ready to come back to the bargaining table, we’re ready to talk,” the Starbucks spokesperson reiterated on Thursday.
Conversely, Starbucks Workers United asserts they are ready to bargain and are awaiting Starbucks’ return to the table with new economic proposals and solutions to over 700 unresolved unfair labor practice charges, which include allegations of retaliation and union-busting.
Baristas Prepare for a Bitter, Public Battle
This latest strike unfolds against the backdrop of Starbucks’ “Back to Starbucks” revitalization effort, which included a $1 billion restructuring. This restructuring, initiated in September, led to the closure of over 600 stores, the layoff of thousands of baristas, and the elimination of more than 900 non-retail positions.
Starbucks is also investing an additional $500 million into what it calls its “Green Apron Service” effort, aiming to enhance the coffeehouse experience through investments in staffing, training, and support.
The union reports an increased interest in stores joining its ranks since the restructuring. However, the National Labor Relations Board (NLRB), which certifies union elections, has been unable to issue decisions or take formal actions since January due to a lack of the minimum number of members needed.
This means votes to unionize additional stores are in limbo, and their baristas lack the full protection of the National Labor Relations Act. Consequently, baristas not recognized as part of the union prior to January cannot legally join the current strike.
Cathy Creighton, former field attorney for the NLRB and now director of Cornell University’s Industrial and Labor Relations Buffalo Co-Lab, suggests that with a relatively low density of unionized stores and the inability to recruit new members currently, this public fight is likely to intensify. “Starbucks workers are much more resilient than I ever would have thought – they’re much more resilient than most workers have been in the past, continuing to fight all these years,” Creighton remarked.
“And they have to do something, or they’ll lose the momentum and the membership that they have gained. This is also a signal to other workers: ‘Hey, we’re out here fighting, come join us.'”
Dachi Spoltore, a five-year barista from Pittsburgh’s Amos Hall location who participated in the strike, declared in a statement that the union is “turning the Red Cup Season into the Red Cup Rebellion.” Spoltore added, “Starbucks’ refusal to settle a fair union contract and end union busting is forcing us to take drastic action. For every one barista on strike, dozens more allies and customers have pledged to honor the picket line and not buy Starbucks while we’re on strike.”
Pressure Mounts from Shareholders and Lawmakers
The escalating labor tensions are also drawing concern from some shareholders and lawmakers. Business Insider previously reported that investors are increasingly worried about the impact of these disputes on the company’s turnaround campaign.
On November 10, over 100 U.S. senators and representatives, led by Sen. Bernie Sanders and the House Labor Caucus, sent letters to CEO Niccol.
Citing his nearly $100 million pay package and “extravagant spending on executives and shareholders,” the lawmakers asserted that “Starbucks has the money to reach a fair agreement with its workers.” They urged Starbucks to “reverse course from its current posture, resolve its existing labor disputes, and bargain a fair contract in good faith with these employees.”
A group of shareholders also published an open letter to the company’s board in October, pushing for a resumption of contract talks before the labor dispute negatively impacts the company’s share price. Starbucks’ stock has seen a decline of over 5% this year. The company’s most recent fiscal report in late October showed a 1% increase in global comparable sales for the fourth quarter, driven by new protein-focused drinks, marking the first comparable sales increase in seven quarters.
The shareholder letter, signed by Trillium Asset Management, Shareholder Association for Research and Education (SHARE), Pensions Investment Research Consultants (PIRC) on behalf of investor clients, and New York City Comptroller Brad Lander, expressed concern for the company’s reputation and potential impact on investors.
This isn’t the first time shareholders have voiced concerns about Starbucks’ labor relations. In 2023, Trillium, the New York Comptroller’s Office, and SHARE were among those advocating for an independent, third-party assessment of the company’s labor practices.
“Starbucks’ failure to reach a contract agreement with the union illustrates mounting operational disruptions and risk exposure for the company and its shareholders,” stated Juana Lee, associate director of corporate engagement at SHARE, on the eve of the strike. “Now is the time for Starbucks to engage in collective bargaining that leads to a fair agreement in a timely manner.”